Ask Question, Ask an Expert


Ask Basic Finance Expert

A critical financial accounting skill is the ability to read, analyze, and to make actionable determinations

from any financial statement. Business leaders gain valuable information from the analysis of their financial statements, the competitors' financial statements, and comparison to industry averages.

The Situation

You are the CFO of an up-and-coming athletic company, which desires to someday become the #1
athletic company in the world. Strategically, the company uses Nike and Under Armour as their key
competitor benchmarks. Your CEO is a big believer in learning from the competition and is requesting two
things from you regarding Nike and Under Armour's most recent annual reports.

Part One: The Executive Summary

No more than 2 pages (can include an appendix with additional graphs, charts, and tables).

1) Competitor Strategies

• Identify and explain one key strategy from each company that the company explicitly
discussed in the annual report.

2) Net Income Margins

• What are the net income margins for both companies?

• How do they compare?

• Who achieves the higher net income margin? Why?

• Tip: Analyze the major cost structure line item in the income statement (COGS, SG&A,
interest, other, and taxes) as a percentage of net sales to identify reasons for better net

income margins. Identify and comment on the differences you see. You may not know

why a particular cost item like COGS is higher or lower, but your CEO only seems
interested in knowing which cost structure items are higher or lower for each company.

3) Inventory Management

• Who has more inventory in terms of days of inventory last year?

• What are their respective 3-year trends for days of inventory?

• What does FIFO/LIFO mean, and which accounting approach does each of the
companies use to value their inventory? (The accounting approach can be found in the
Notes section.)

4) Cash is King

• How much net cash from operations did each company generate last year?

• In laymen's terms, how is each company spending their cash with respect to

reinvestments in the business, changes in debt, and returning money to shareholders?

5) Liquidity

• How is the current ratio calculated?

• How do the companies compare in terms of the current ratio, and what are their respective 3-year trends?

• Does their current ratio indicate that either (or both) of these companies could go bankrupt soon? Explain

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91767272
  • Price:- $50

Priced at Now at $50, Verified Solution

Have any Question? 

Related Questions in Basic Finance

An article observes the federal reserve announced that it

An article observes: "The Federal Reserve announced that it would open currency swap lines-in essence, printing dollars and exchanging them for euros. . . ." Why would the Fed and the European Central Bank enter into suc ...

1 in what sense could one argue that if managers make

1. In what sense could one argue that if managers make decisions using breakeven analysis, they are not maximizing shareholder wealth? How can breakeven analysis be modified to solve this problem? 2. Explain the differen ...

As a new junior analyst for a large brokerage firm you are

As a new junior analyst for a large brokerage firm, you are anxious to demonstrate theskills you learned in college and prove that you are worth your attractive salary. Your firstassignment is to analyze the stock of Gen ...

1 what are time-series research designs and how are they

1. What are time-series research designs, and how are they used to learn about changes in behavior over time? 2. What types of independent variables can be used in participant-variable research designs, and what conclusi ...

1 why review the disclosure of allowance for loan losses

1. Why review the disclosure of allowance for loan losses for a bank? 2. Why review the disclosure of nonperforming assets for banks? 3. Why could a review of savings deposit balances be important when reviewing a bank's ...

1 what is the base salary of the international assignee2

1. What is the base salary of the international assignee? 2. How much is the G&S differential and how was it calculated? 3. How much is the housing differential and how was it calculated? 4. What type of allowance did th ...

A firm is considering the development of severalnew

A firm is considering the development of severalnew products. The products under consideration are listed in the next table. Products in each group are mutually exclusive. At most, one product from each group will be sel ...

1 based on the following information construct a

1. Based on the following information, construct a traditional financial institution balance sheet AND a balance sheet including off-balance sheet items. Market value of assets = 200                                      ...

1 banking services list and describe some of the banking

1. Banking Services. List and describe some of the banking services offered by financial institutions. 2. Debit Versus Credit Card. What is the difference between a debit card and a credit card? 3. Special Services. Name ...

Obtain financial statements for microsoft for the last five

Obtain financial statements for Microsoft for the last five years either from its Web site ( or from the SEC's online EDGAR site ( First, look a ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro